The Great Depression

The Great Depression Chapter 25

I. The Coming of the Great Depression • The Great Crash • Between May 1928 and September of 1929 the average price of stocks increased over 40 percent • October 21 and October 23 alarming declines in stock prices

The Great Crash Continued • October 29, 1929: “Black Tuesday” • In the months that followed, the market would continue to decline

Causes of the Depression • Most historically attributes of the Great Depression is that it was so severe and lasted so long… question then remains, why was it such a bad one? • Lack of diversification in the American economy

Causes of the Depression Continued • Maldistribution of purchasing power and the weakness in consumer demand… • as industrial and agricultural production increased, the proportion of profits going to farmers, workers and other potential consumers was too small to create and adequate market for the goods the economy was producing this lead to demand not being able to keep up with supply aka a surplus! • During the 1920s, as long as corporations had continued to expand their capital facilities, the economy had flourished…

Causes of the Depression Continued • Poor Credit Structure of the Economy • farmers deeply in debt • small banks in trouble • big banks in trouble, too

Causes of the Depression Continued • Decrease in International Trade • International debt structure

Thus “Black Tuesday” was not the cause of the Great Depression, but …

The Progress of the Great Depression • Crisis would steadily worsen over the next three years • Collapse of much of banking system would follow the stock market crash • Role of the Federal Reserve: if they acted more responsibly, a severe depression might have been avoided

II. The American People in Hard Times • Unemployment and Relief • Midwest and Northeast rocked with unemployment • Most Americans had been trained to believe that every individual was responsible for his or her own fate • men wandered the streets

Unemployment and Relief Continued • Limited gov’t and private assistance… most gov’t officials felt that any welfare system would undermine the moral fiber of the country • Strange city scenery • Farm income down 60% between 1929 –1932

African Americans and the Depression • 1930 Atlanta Black Shirts organization adopts the slogan “No Jobs for N******s Until Every White Man Has a Job!” • Traditional patters of Segregation and disfranchisement survived the Depression largely unchallenged • NAACP began to work diligently to win a position for blacks within the emerging labor movement

Mexican Americans in Depression America • 1930s there were approximately 2 million Latinos in the United States • similar to blacks in that whites soon demanded menial jobs previously held by Latinos…

Asian Americans in Hard Times • even in California, where the largest Japanese / Chinese American populations resided… even well educated Asians had trouble moving into mainstream professions • like Blacks and Hispanics… • Influx of whites from the Great Plains meant general bad news for all minorities in California

Women and the Workplace in the Great Depression • Depression served to strengthen the widespread belief that a woman’s place was in the home

Women and the Workplace in the Great Depression Cont • ½ of all black working women lost their jobs in the 1930s • But, at the end of the 1930s 38% of all black women were employed compared with 24% of all white women…

Depression Families • middle class families accustomed to steady growth during the 1920s saw that replaced with unemployment and uncertainty • consumer patterns developed during the 1920s retreated • Average household population grows: • although divorce rate decreased (because of cost)-

III. The Depression and American Culture • Depression Values • BUT in the end, the Depression did very little to erode the success ethic

Artists and Intellectuals in the Great Depression • focus of a collective social response to social circumstances • Photographers hired by Federal Farm Security Administration to take documentary photos • Writers and playwrights attempted to capture social injustice taking place

Radio • Most popular forms of mass entertainment were those that served as a distraction to the harsh reality taking place • Soap Operas (sponsored by soap)

Radio Continued • Radio programs broadcast live: before audiences in theatres and studios • Some of the most dramatic moments of the 1930s were a result of radio coverage of celebrated events • Encouraged families and individuals to center their lives around the more around the home than they had in the past

The Movies • one would think individuals would forgo spending money on movie tickets in the middle of a Depression, but by the mid 1930s Americans were still watching movies in large numbers • Movies getting better:

The Popular Front and Left • Popular Front: coalition of “antifascist groups” the most important of which was The American Communist Party • claimed that the government was controlled by business interests • “Communism is twentieth-century Americanism” • helped mobilize writers, artists and intellectuals behind a pattern of social criticism (great majority of writers had no connection to Communist party) • The Lincoln Brigade, consisting of 3,000 volunteer soldiers goes to Spain to fight against Franco (Ernest Hemmingway, For Whom the Bell Tolls) • Social Issues

The Popular Front and Left • ACP was not the open, patriotic organization it tried to appear as… took it’s orders from Comintern in Russia • New Deal would embrace policies that would challenge capitalist norms

IV. The Ordeal of Herbert Hoover • The Hoover Program • When crisis first hit, Hoover’s response was to attempt to restore confidence in the economy • But mid 1931 economic conditions had deteriorated so much that the structure of voluntary cooperation had collapsed… and Hoover could not stop them

The Hoover Program Continued • Hoover made weak attempts to use government spending as a tool for fighting the Depression • Before the crash, Hoover had begun to construct a program to assist the troubled agricultural economy. • 1929 Agricultural Marketing Act: first time a gov’t bureaucracy would be established to help farmers maintain prices • Hawley-Smoot Tariff of 1930 • Neither helped farmers sufficiently

A Deepening Crisis • 1930: Democrats win control of the House • Many Americans feel the President is personally responsible for crisis • Shantytowns = • May 1931 largest bank in Austria collapses and panic spreads throughout Europe and into the US when • Hoover comes up with a sound proposal to allow countries having to pay reparations one year moratorium on payments…

A Deepening Crisis Continued • January 1932: Reconstruction Finance Corporation (RFC) • government agency whose purpose was to provide federal loans to troubled banks, railroads, and other businesses • made funds available to local governments to support public works projects and assist in relief efforts

Popular Protest • During the early years of the Depression, most Americans were too stunned or too confused to raise many effective protests… but by mid 1932, radical and dissident voices were becoming loud and pervasive • Farmers unrest

Popular Protest Continued • Most celebrated protest came from American Veterans • Clearing the Bonus Marchers • Hoover now confirmed as aloof and out of touch with American public…

The Election of 1932 • Republicans dutifully renominate Hoover to head of Republican Party • Democrats nominate the governor of New York, Franklin Delano Roosevelt • Winning the election • Differences in candidates • Roosevelt wins in a Landslide: receives 57% of the popular vote and won every state but five • Democrats also take control…

The Interregnum • In February, just a month before the inauguration… a new crisis developed when the American banking system began to collapse • Harding continued to try to extract a promise from Hoover to maintain current budget system… • March 4, 1933: the Day Roosevelt took office… Hoover was convinced the country was heading to ruin, Roosevelt was beaming and buoyant

The Great Depression